The Vietnamese Ministry of Finance has recently issued a circular on establishment of a petroleum price stabilization fund.
Petroleum trading firms, all are state-owned, allowed to charge additional VND500 (US$0.028)/liter of fuel sold, will contribute to the fund that will be used to support the companies when they have losses.
Local petrol wholesalers must estimate the breakeven price in the fourth quarter annually based on a benchmark of Singapore's gasoline prices, and additional costs including transportation, insurance and taxes, the ministry said.
They should keep domestic petrol selling price unchanged when the monthly world petrol price falls down to a rate that makes enterprises’ estimated breakeven selling price maximal VND500 per liter lower than the current domestic selling price.
If the world petrol price continues falling down to a rate that makes their breakeven estimated selling price over VND500 per liter lower than the current domestic selling price, they are allowed to cut the selling price.
Enterprises should be active in selling price cuts with the maximal cut should not exceed their estimated breakeven prices.
Upon the global petrol price rise to a level that make enterprises’ estimated breakeven selling price higher than current domestic selling price, they are required to keep domestic petrol selling price unchanged in line with the time set by the government to ensure minimal petrol circulation. Losses arising from keeping domestic selling price stable will be compensated by the petrol price stabilization fund.
After the time, if the world price hits a low or stable level that makes the breakeven price equal or maximal VND500 per liter lower than the current selling price, enterprises must continue keeping domestic selling prices unchanged.
If the global price continues increasing to a rate that makes the breakeven price higher than the current domestic selling price, enterprises are authorized to raise the domestic selling price by maximal VND500 per liter for each hike after registering with ministries and agencies.
During the time keeping domestic selling price stable in accordance with the government’s decision to ensure minimal petrol circulation, if the breakeven price is higher than the current domestic selling price and if capital of the price stabilization fund is exhaust; enterprises are allowed to raise the domestic selling price by maximal VND500 per liter for each price hike after registering the price increase rate to relevant ministries and agencies.
Currently, a liter of gasoline A95 is priced at VND11,500 and of A92, VND11,000.
Vietnam is estimated to have imported 2.945 million tons of petroleum products valued at US$1.128 billion, down 17.8 per cent on year in volume and down 60.2 per cent in value, the state-run General Statistics Office (GSO) said. (The People, Labor)
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